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      March 30, 2020

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SunTrust vs Discover Student Loans

To help you find the Best Student Loans, TopConsumerReviews.com provides you with an in-depth comparison of SunTrust and Discover Student Loans.

To see ALL of our reviews for the Best Student Loans, please Click Here

Apply for Your Student Loan at SunTrust Today As the costs of higher education rise, so does the need for student loans. While some individuals are eligible for federal loans, those loans don't always cover the full cost of getting an education - not just tuition and room/board, but books, laptops, transportation and other expenses. And, people who are ineligible for federal loans don't necessarily have overflowing savings accounts to match their college or university costs.

Private student loans are the way that many students close that gap. On average, students have nearly $40,000 in student loan debt at the time of graduation; without those funds, their aspirations of being a teacher, engineer, or social worker may have been put on hold indefinitely.

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Best Reviews

2020

Student Loan Reviews

5 stars
SunTrust

SUNTRUST

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Features:

  • No application or origination fees
  • No prepayment penalties
  • No payments required until 6 months after leaving school
  • Interest rate discounts available
  • Cosigner release option after several years of on-time payments
  • Variable interest rates from 3.864% to 9.262% APR
  • Fixed interest rates from 4.599% to 10.329% APR
  • Minimum monthly payment of $50 during repayment period
  • Customer service: 866-232-3889

TopConsumerReviews.com Best-In-Class Blue Ribbon Award SunTrust's motto is "Lighting the Way to Financial Well-Being", and they place a strong emphasis on helping the average American to move from financial stress to confidence. Their student loans fit well with this goal, with a wide variety of options and borrower-friendly advantages.

In order to be eligible for one of SunTrust's two main student loans, Custom Choice or Graduate Business School, you will need to meet the following criteria:

  • Be a U.S. citizen or permanent resident
  • Be enrolled at least half-time in a Title IV program at an eligible school (which you can find on the first page of the loan application; after entering your school's state, you'll find a dropdown box with all of the eligible schools included)
  • Be the legal age of majority (or at least 17 if applying with an older cosigner)

One small note to keep in mind: SunTrust Custom Choice and Graduate Business School loans are not currently available to students whose permanent state of residency is Iowa or Wisconsin.

As with most of the private student loan providers we reviewed, SunTrust has no application or origination fees, no penalties for paying off loans early, and no payments required until six months after you leave school. But, compared with the competition, SunTrust has interest rates that are considerably lower (see above in the list of features), along with more beneficial interest rate reductions available, such as:

  • 1% reduction of your principal balance when you graduate
  • Up to 0.50% rate reduction for automatic payments
  • Seasonal offers of 0.25% interest rate reduction

As the name implies, the Custom Choice program has a number of options for your loan (the Graduate Business School loans do as well, but their options are slightly more limited. See the business school loan page for more details). Once your student loan application has been approved, you will be able to compare the available loan options:

  • Rate type: fixed or variable
  • Loan term: 7, 10, or 15 years (7 or 10 for Graduate Business School loans)
  • Repayment options: immediate repayment, interest-only, partial interest, or full deferment until 6 months after leaving school

Be aware that, unless you have a solid employment history and a very good credit score, you'll likely need a cosigner who does meet those criteria: the average borrower (or cosigner) who qualifies for a SunTrust student loan has a FICO score of 750, with a minimum requirement in the mid-600s.

We were genuinely impressed by SunTrust's compassionate approach, for lack of a better phrase, to the structuring of their student loans. For example, while some lenders have no mercy when it comes to the death or disability of the primary borrower and still insist on being repaid, SunTrust offers loan forgiveness in the event of the primary borrower's death or disability (with proper documentation, of course). Also, if you need a cosigner to qualify for a loan from SunTrust, that cosigner can be released after payment of the first 48 consecutive, on-time monthly payments.

Because of their lower interest rates and borrower-friendly repayment terms, we give SunTrust student loans our highest rating of 5 stars as our top pick for student loans.

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3.5 stars
Discover Student Loans

DISCOVER STUDENT LOANS

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Features:

  • No application or origination fees
  • No prepayment penalties
  • No late fees
  • No payments required until 6 months after leaving school
  • Variable interest rates starting at 3.49% APR
  • Fixed interest rates starting at 6.24%
  • Several rewards programs, including good grades and auto debit
  • Customer service: 800-STUDENT (788-3368)

If you think "credit cards" when you hear the name Discover, you'd be right - but they are also one of the nation's largest lenders when it comes to private student loans. Whether you're studying as an undergraduate, heading to graduate school, or need a loan to cover your residency, MBA, or period of study for the bar exam, Discover has a student loan for you.

While eligibility terms depend on the loan you're seeking, here's what you need for a Discover Undergraduate Loan:

  • Enrollment at least half-time in a Bachelor's or Associate's program, seeking a degree
  • Satisfactory academic progress (defined by your school)
  • U.S. citizenship or permanent resident status (or a cosigner who is)
  • Credit check
  • 16 years or older

You can borrow up to 100% of the cost of attendance at your school, including books, housing, tuition and more; the amount will be certified by your school, ensuring that you don't borrow more than you'll actually need.

It's also no surprise that Discover has rewards that will remind you of their Cashback Bonuses offered with their credit cards. Like many lenders, Discover will give you a .025% interest rate reduction if you enroll in automatic payments during your repayment term. Also, if you get a minimum GPA of 3.0, you can qualify for a one-time cash reward of 1% of your total disbursed loan principal amount. Depending on the size of your loan, that could cover quite a few textbooks!

Other benefits of student loans through Discover are low monthly payments ($25/month) if you choose an in-school repayment option, deferment periods if you're on active military duty or serving in a public service organization or medical residency, and an assistant department if you're having financial difficulties that are impacting your ability to repay your student loans.

Although Discover Student Loans' perks are attractive, it's important to be aware of their history in the student loans market. Back in 2015, Discover Bank was ordered to pay a fine of $2.5 million dollars to a penalty fund established by the Consumer Financial Protection Bureau, along with returning $16 million to over 100,000 borrowers. The reasons for the fine included illegal debt collection tactics, such as early-morning and late-night calls to borrowers, illegal servicing practices, and other issues. While it appears that Discover has cleaned up its act in the meanwhile, we can't ignore that their loan servicing has had significant issues in the past.

Overall, Discover Student Loans offer significant discounts and cash bonuses to borrowers with competitive terms and rates on their student loans. We give them a good rating that could easily improve as Discover continues to show improvement in honesty and ethics when servicing student loans.

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Continued from above

Fortunately, there are many lenders who want to make it as affordable and simple as possible to complete undergraduate and graduate-level studies. Some represent well-known, established financial institutions, while others work directly with networks of community banks to get much-needed cash into the hands of eager learners.

Comparing offers from lenders can be as easy as going online; in a matter of minutes and mouse clicks, you can see a variety of interest rates, repayment terms, and other details of each program for which you are eligible. This saves you significant time compared with going hat in hand to your local bank or other lending institution, hoping that they will say yes to your loan application.

When deciding on which lender to use for your student loan, you should consider the following factors:

  • Interest rates. The higher your interest rates, the more you pay over the life of the loan. Does the lender have rates that are competitive? Does the lender offer you the choice between fixed and variable rates?
  • Loan terms. What is the repayment term? Does it give you enough time to get a good job and pay it back? Can you pay it off in advance with no penalty?
  • Discounts. Can you get your interest rates lowered by setting up automatic payments from your checking account? Will you get any perks for having a relationship with the lender in other ways, such as a checking account or credit card?
  • Reputation. Some lenders have a solid history of working with borrowers, while others have a not-so-great track record when it comes to customer service after the loan has been disbursed. How does this lender measure up?

TopConsumerReviews.com has reviewed and ranked the best Student Loan providers available today. We hope this information helps you to get the money you need for your studies right away!

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